External workforces are more crucial than they’ve ever been to reactive, flexible and successful businesses. But how can people leaders ensure their organisations are in the right condition to make the most of their external talent?

How did SAP Fieldglass come into being, and what has been your role in that?

Fieldglass started in 1999, and was purchased by SAP in 2014. SAP Fieldglass is a leader in external workforce management, which involves helping organizations to plan and manage, end-to-end their contingent workforces. These workforces are typically made up of contractors and freelancers, as well as services providers such as professional services, marketing agencies, facilities, anything that might be outsourced.

When I joined in January of 2017, I realised that we were not seeing enough data on external workforce management, and the market was representative of large enterprises. We wanted a better mosaic of that information, and we didn’t want to rely solely on pockets of information. Another thing that we found was that a lot of the data out there tended to represent small and medium-sized businesses. There were smaller, more discrete studies, but were not representative of large enterprises, which is the primary customer base of Fieldglass. So, we wanted to find out where talent is being used throughout larger enterprises. What role is it playing? Where is it located? An, crucially, what are the business impacts that external talent is having?

Our first study was with Oxford Economics in 2018, about the forces reshaping the future of work. We were interested in how work gets done, with external workforces as the focal point. Some enterprises may not think about their total workforce, including their non-payroll talent. They often think of their workforce in more traditional terms, as solely being comprised of those people who are on the payroll. But I think that, certainly after 2008, that perception changed. Employed workers are more in control than ever, and they have more options than ever. The fact that every businesses is on this digital transformation trajectory means that they need critical skills, and people are going out and acquiring those skills. Nowadays, employees are basically able to chart their own course, and they don’t have to be on your payroll to do so. The hotter the skills, the more options they have.

Why do you think there has been this growth in the use of external workforces?

Businesses, frankly, like the flexibility and agility that this gives them, to be able to pivot and pursue things. The pace of business is obviously getting faster and faster, and these workforces allow them to catch up more effectively. The modern workforce is forever changed, it’s been redefined. Spend on non-payroll talent makes up about 42% of all workforce spend for an enterprise. This year, we did our second study with Oxford, wherein we zoomed in on the services provider component of this, called The Big Reveal. We called it that because, in many cases, you will find that organizations are procuring are procuring people services like they would a laptop. This means they don’t have the visibility into contract terms, into whether these people have the right certifications and licenses to do the job they’ve been contracted to do.

What we found was that visibility into that is not as strong as it as it should be. This creates quite a few challenges, in particular that organisations are not able to manage the services provided with any degree of rigor. 44% of organizations are experiencing digital security breaches, sometimes frequently and on nearly every engagement. You can’t manage what you can’t see. So you don’t have the visibility, you’re preparing the talent like you would material, then you’re not going to have visibility at that level. Who’s behind your firewall? Who’s working for you? What are they doing? Do they have the certifications or the licenses they need? If you don’t have that information, then you’re you’re going to see things like digital security breaches, unauthorized spend, issues with governance and deviation from master service agreements that have been put in place.

What’s the biggest challenge organisations face right now in managing external workforces?

There are a few major challenges. Firstly, there’s eliminating this idea of your ‘invisible workforce’. Because if you’re not thinking about them as an extension of your workforce, then you probably aren’t planning for them that way. Organizations now need to really think about how the modern workforce has been redefined in the last few years. What, then, are they doing differently in terms of talent planning responsibly? Think about it.

We have customers who are taking a zero-based budgeting approach to talent planning, starting out by thinking, ‘What’s the need?’ They’re thinking, is that an FTE, a headcount, a contractor or a services provider? Large companies working with us are starting to shift in that direction. 11% of our of our respondents in our survey said that they have the visibility, and they’re far ahead of others who are not managing talent with that degree of rigor. What they’re actually seeing is that they’re more empowered, so they know that they can make a more profound impact on the organization. They are reaching out, rising above the functional silos, and they’re trying to drive more workforce planning by saying, ‘Let’s look at this data, and let’s talk about the big picture around our workforce, and how we’re getting work done.’

So, let’s look at how we’re getting work done, which is really where the topic of talent management has shifted to. It’s not based onthe paradigm that it used to be, which had your employee workforce at the centre, and then everyone else operating around the edges. This non-payroll talent is actually operating at the heart of the enterprise. In our study, we found that two thirds of organizations said that they can’t keep the lights on without it. It’s 42% of their spend, and it’s fundamental to getting their work done and meeting their financial goals.

Organisations need to learn from some of the more progressive business that are taking a zero -based budgeting approach, or figuring out how to fill their need. Don’t start with your headcount and then augment it, because this automatically puts external talent at the edges, except they’re not working at the edge.

How can you ensure external talent is engaged in the cultural mindset of your organisation?

External workforces can actually bring something new to your cultural mindset. In the 2018 study, we found that there was a very positive feeling about the fresh thinking and fresh perspectives that external talent is bringing into the organization. It opens up new new ways of thinking and new approaches. Non-payroll talent are experts at what they do, and they’re core to your teams, in that broader sense. I don’t think about my team as just employees, I think about my team as critical individuals that we need to get work done well. So, culturally, I feel like they bring more, they bring a great sort of texture and diversity to the team. They will give you their fresh opinions, without limitations, which is challenging, but we all need that outside-in perspective. However, when you when you think of an external service provider, as part of the team, it comes across in your behavior and how you raise them. So, culturally, they feel like they’re part of the team, too.

How important is employer brand to bringing in the right external talent and getting them engaged in your organisation?

Not only is it crucial to attract the best talent, but you need to make sure that you’re making that connection with them. New employees have just as many questions about us, as we have of them. During that ‘getting to know you’ phase, their first impression is going to be formed before they interview, before they’re even considering working for us. Talent form an impression of you based on your brand, and your brand is defined by what you’re doing out there in the in the market. Do you have purpose driven initiatives? Do we? Are you walking the walk when it comes to making those initiatives happen, or are you just saying it and showing up at the right conferences? Current generations coming into the workforce want to see it – it’s not a talking point to them. They’re looking closely at what you’re saying to your customers, whether you have sustainable supply chains in place, and whether you have enough transparency in your operations. If you want to hire the right talent, it has to start with your employer brand.

How can people leaders go about creating that employer brand and make it work?

I’ve been creating a new brand framework that very much addresses the that employer brand. I’m thinking about how what we’re saying, how we’re behaving, and what we’re putting our money behind, is resonating into a message and a value proposition for candidates. Think about the candidate value proposition, and think about that by persona, and the different types of skills for your roles. Does your employer brand proposition resonate with those individuals? Work on that alignment, and make sure you’re consistent in the market with what you’re saying, who you are, what you do and what you stand for. You have to tell that story through the lens of a prospective employee.